AT&T Starting New Prepaid Plan in No-Contract Rivalry

Oct. 1 (Bloomberg) -- AT&T Inc., the second-largest U.S.
wireless-service provider, unveiled a $99 smartphone with a $65
a month pay-as-you-go plan, stepping up competition with prepaid
carriers such as MetroPCS Communications Inc.

AT&T will start offering the plan on Oct. 7 under its
GoPhone brand, according to a statement. The service, designed
for smartphone users, is $10 less than previous pay-as-you-go
offers with similar features. It includes unlimited talk and
texting, along with 1 gigabyte of data per month, with no
contract required.

Carriers are increasingly targeting the prepaid market as
the saturated U.S. wireless industry makes it harder to add more
contract customers. Prepaid plans appeal to young people,
bargain hunters and consumers with poor credit.

Even with the price cut, AT&T’s new offering will be
costlier than rival services. T-Mobile USA Inc. has a $60-a-month plan that offers 2 gigabytes of data. MetroPCS and Sprint
Nextel Corp.’s Virgin Mobile unit, meanwhile, both sell $55
unlimited programs for smartphones.